The profound demographic trend that is boosting demand for investment advice — the millions of baby boomers retiring or planning their retirement — also is threatening the financial advisory sector with a talent shortage.

Even as more and more older Americans seek advice on bolstering their nest eggs, advisers themselves are looking to head off into the sunset. Too few younger advisers are in the pipeline to replace them.

“It is alarming — and on the verge of being a crisis,” said Robert Patrick, director of private-client-group education and development at Raymond James & Associates Inc. “We’re going to have people retiring in droves out of our industry.”

The result could hurt advisers as they try to meet growth targets for their firms, as well as make succession plans.

A 2011 survey by Cerulli Associates Inc. showed that 22% of advisers were below 40 and only 5% were younger than 30. The average age of advisers was 49.6, up one year from 2010. The average for wirehouse advisers was 50.6.

The total number of advisers fell to 320,378 in 2010, from 334,919 in 2004 — a 4.3% decline, according to Cerulli.

“You see the continuing graying of the industry,” said Tyler Cloherty, a Cerulli senior analyst. “There’s not a whole lot of new talent coming in on the low end. You’re going to see a shrinking of the advice industry.”

A report by the Bureau of Labor Statistics shows that the number of jobs for personal financial advisers is projected to grow by 66,400 by 2020, a 32% increase that is far larger than the 14% average growth rate for all occupations.

But filling those positions could be a challenge.

“There aren’t any people coming into the industry,” said Danny Sarch, president of Leitner Sarch Consultants Ltd.

A perception problem is dampening enthusiasm for financial management. Despite an increasing emphasis on fiduciary duty and holistic planning, jobs in the sector are perceived to be all about pushing financial products on clients.

“There’s an incredible stigma on sales from the younger generation,” said Michael Kitces, partner and director of research at Pinnacle Advisory Group LLC. “They don’t want to be a salesperson.”

According to industry observers, the financial management business hasn’t done a good job of explaining that it now is primarily about helping people meet their long-term financial goals.

“The knowledge of the industry from a [job] candidate standpoint is lagging behind what the industry actually is,” Mr. Patrick said.

The growing complexity of financial management also is contributing to the difficulty that firms — large and small — have in recruiting.

“There’s not a new generation of people coming up, because it’s much harder to make a living doing this,” said Randy Warren, chief investment officer at Warren Financial Service & Associates Inc.

Firms may be reluctant to hire college graduates with no experience because of the age difference between them and the clientele with which they will be dealing, he said.

“They have to realize that the bulk of the clientele is between 60 and 70,” Mr. Warren said. “They’re not going to trust a 22-, 24-, 28-year-old kid to manage their portfolio.”

Tom Sagissor, a regional director at RBC Wealth Management, concurs.

“While [he] may be incredibly capable, unless he’s joining a team, it is very difficult for a candidate right out of college to convince clients that they will be able to handle all of their finances,” Mr. Sagissor wrote in an e-mail.

The average age of RBC’s hires in fiscal year 2012 has been 38, he said.

The hollowing-out of training programs is another factor contributing to the lean talent pipeline, according to experts.

“When business is volatile, the first thing you cut is advertising,” said Craig Pfeiffer, president of Hohting Group LLC. “The second thing you cut is training.”

The wirehouses gutted their training programs following the financial crises in 2001 and 2008, according to Mr. Sarch.

“The industry has stopped training twice in the last 10 years,” he said. “They’re struggling to come up with the right formula, and I don’t think they have yet.”

Training is undergoing a fundamental transformation throughout the industry, according to Mr. Patrick.

Training periods are longer and expectations have been lowered so that recruits are given more time to build their own books of business.

The change at Raymond James was “revolutionary as opposed to evolutionary,” Mr. Patrick said.

The company, which trains classes of 70 to 100 recruits at a time, lengthened the program from four weeks to two years, established formal mentoring and now allows new hires to stay on salary for five years instead of three.

“We’ve extended the runway,” Mr. Patrick said. “It takes longer to establish relationships and open accounts than it did in the 1980s and 1990s.”

Bank of America Merrill Lynch has expanded its training program to 43 months, from 24 months, to allow trainees more time to earn a salary before they are expected to generate revenue on their own.

The move has helped increase retention for trainees who are licensed during the program to 42%, from between 28% and 36% in the period of 2000-2007.

About 24% of Merrill Lynch’s 16,000 advisers are over 55. At any given time, there are about 4,000 people in its training program.

During training, associates sit for the Series 7 and Series 66 licensing exams, take courses in the Certified Financial Planner Board of Standards Inc. curriculum and are paired with mentors in the field as they learn to work with clients and develop new business.

“By the time they get to graduation, they’re soaring,” said Dwight Mathis, head of Merrill Lynch’s new financial adviser strategy.

Morgan Stanley Smith Barney LLC has a 41-month training program and wants to hire 1,000 adviser associates this year, according to Christine Pollak, executive director of corporate communications.

UBS Wealth Management Americas has a four-year program that includes classroom and online instruction, as well as mentorships and branch work, according to spokeswoman Marina Aung.

Wells Fargo Advisors LLC de-clined to comment.

Like baby boomers’ retirement in general, the true impact of advisers’ retirement hasn’t yet hit. But when it does, it could reverberate.

“It’s going to be a very expensive problem to fix once it’s here,” Mr. Kitces said.

It looks like not everything is smooth sailing at Morgan Keegan these days, as the brokerage house becomes part of Raymond James. RegisteredRep.com reports that despite the retention offers Raymond James has put on the table to keep Morgan Keegan’s financial advisors in the fold, seven advisors have left since December, according to FINRA records. That’s not all – Morgan Keegan lost around 190 advisors in the six months before, the publication notes, after Regions Financial Corp put the brokerage up for sale. All told, Morgan Keegan has lost 15% of their advisors since they first went up for sale. In some of the recent defections, the people leaving were already planning on going elsewhere before Raymond James agreed to buy the company. This includes folks like Terrence Puricelli, who moved on to Wells Fargo Advisors, and Charles Allain III, who departed for LPL Financial. Other advisors left in January, with one going to Wells Fargo, two going to JP Morgan Securities, one departing for Wunderlich Securities, and another moving on to Ameritas Investment Corp. Ron Edde, a senior executive recruiter for Armstrong Financial Group, claimed that those who left in January were what RegisteredRep.com characterizes as “average or below-average producers.” He also said that the retention offers Raymond James put on the table would vest at the end of March, and were only for big producers. Edde also said that those financial advisors who brought in $200,000 or less did not have much of a future elsewhere. “A prostitute will have a better chance of getting a job at the Vatican,” Edde argued.

Research shows that the top four wirehouses have lost “substantial market share in both assets under management and in adviser head count over the past three years,” InvestmentNews.com reports. And the study says that things won’t be getting better any time soon.

According to research from Cerulli Associates Inc., the four wirehouses — Bank of America Merrill Lynch, Morgan Stanley Smith Barney LLC, UBS AG, and Wells Fargo Advisors – have seen their “share of retail assets under management” drop “from 49.7% in 2007 to 42.8% at the end of last year,” Investment News writes. At the same time, the number of advisers also fell from 56,901 to 50,742 during that same time period.

Scott Smith, an associate director at Cerulli, said that “the numbers reflect a combination of growth in the independent channel and an increased focus by the wirehouses on the productivity of their advisers.” Smith told Investment News he expected the four wirehouses to have at least 6,800 fewer such staff over the following five years. The firms “could cut another 10% or more of their adviser forces,” he said.

Of those advisers, around 20% of them will leave on their own volition, and the rest “essentially will be shoved out the door,” Investment News says. And Smith notes that “the wirehouses see themselves better off with one $1 million producer than four $250,000 producers,” meaning that competition will be tougher to get the best staffers.